Our next example is on the E-mini Russell contract, the March 2007
daily chart (see Figure 6-14). This price cluster came in between 774.60 and
775.20 and included three key price relationships:
.382 retracement of the 723.10 low to the 806.50 high = 774.60
(point 1 to point 4)
.618 retracement of the 755.50 low to the 806.50 high = 775.00
(point 3 to point 4)
1.0 projection of the 786.80 high to the 755.50 low, projected from the
806.50 high = 775.20 (point 2 to point 3 projected from point 4)
The actual low was made at 775.50, which was within 3 ticks of the top
of the cluster zone—an acceptable margin. A full 34-point rally followed
this cluster setup.